A is for Argentina

When asked to name the hot IT outsourcing locations today, most of us wouldn't be pressed too hard to rattle off a list that includes India, Eastern Europe and China. After all, in our technical communication and language services industries, many providers have their production centers located in these countries too. Argentina might be a less obvious answer, but its popularity is growing rapidly, along with the growing reputation regional neighbor Brazil enjoys as part of the BRIC (Brazil, Russia, India and China) economies.

The Gartner research on Outsourcing 2007-2008, described in the January/February 2008 issue of tcworld, included Argentina among the top 30 countries for offshore services. And there is a growing and visible group of language services companies that are based in or operate out of Argentina.

A clear indication of the growing importance of Argentina is the fact that major companies have chosen to set up here. For instance, Google chose Argentina to become the company's third main pillar in addition to its main headquarters in Mountain View (USA) and its European location in Dublin (Ireland). Similarly, NEC chose Argentina as its regional hub for software development in Latin America, and there are many other examples. The software industry in Argentina has proven to generate value, employment and competitiveness.

This article aims to provide some insights into what makes for Argentina's growing popularity as a destination for outsourcing services - not only for the Latin American region but for many leading companies globally.

Difficulties overcome

Argentina has quickly recovered from the deep economic crisis it suffered in 2001-2002. In the 1990s, the fact that the Argentine peso was directly linked to the US dollar made Argentina one of the most expensive countries in the world. In 1998, hyperinflation, deep recession and widespread dissatisfaction with the administration led to Argentina having four presidents within ten days, while the country defaulted on its international debt obligations. Argentineans remember the president from the 1990s and there's a popular myth that if you name him, you'll have a terrible luck (so, he will remain nameless here...).

Once the linkage between the dollar and the peso was abandoned, Argentina became more competitive. The country started to re-industrialize, exports increased and the unemployment rate dropped from 25 to 8.5 percent. Today, Argentina has enjoyed five years of continuous GDP growth at an average of eight percent, and has become the fastest growing country in Latin America. This turnaround created the economic stability needed to place Argentina in the global IT picture.